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I have figured out to resolve the problems I was having: In the cloudbase-init-unattend.conf I had to remove the NetworkConfigPlugin, LocalScriptsPlugin, and NTPClientPlugin. Once I did this both issues I was having went away (long delay and constant reboot).

I also had to set allow_reboot to false in cloudbase-init.conf file (it was already false in cloudbase-init-unattend.conf).